Top Bank Statement HELOC Providers With a 5-Year Interest-Only Draw and 25-Year Repayment

The Quick Read: The best provider for a bank statement line with a five-year interest-only draw and 25-year repayment depends on your property, credit, equity, and how your income shows up in deposits, because Lendmire places these lines with select wholesale lenders whose terms differ by occupancy and structure. On an investment property, the structure is fixed: five years of interest-only payments, then 25 years of principal and interest. The line is tested on you, not on the rent. Everything below is subject to lender guidelines and full file review.

• Investment-property limits: typically up to 70% CLTV, a 700 minimum credit score, and a maximum line of $500,000.
• Income test: bank statement programs generally build income from 12 to 24 months of deposits, per HousingWire’s non-QM guide, after non-income deposits are removed.
• Draw rule: at least 75% of the line is drawn at closing, and pricing floats during both phases and never converts to fixed.
• Title rule: an individual or a revocable living trust holds title. An LLC cannot.
• Planning point: the payment steps up when repayment begins, so you plan for it from day one.

Key Terms Defined

Draw period: the stretch when you can borrow against the line. On the structure here, it runs five years.

Repayment period: the stretch after the draw ends. You stop borrowing, and the balance is paid off in full over the remaining 25 years.

Interest-only: a payment that covers interest and nothing else. The balance does not shrink during the draw.

CLTV (combined loan-to-value): all the debt on the property, including your first mortgage, divided by the property’s value.

DTI (debt-to-income): your monthly debts divided by your monthly income. The program caps it at 50%.

Expense factor: a percentage the lender subtracts from business deposits to account for the cost of running the business. It turns raw deposits into qualifying income.

Non-QM: a loan that sits outside standard agency mortgage rules. Bank statement loans and DSCR loans both live there.

What a Bank Statement HELOC Actually Is

A bank statement HELOC is a revolving equity line that is reviewed around deposits instead of tax returns. It is a real home equity line of credit. It is not a loan that skips underwriting.

Self-employed investors are the natural audience. Depreciation, payroll, contractor costs, and similar write-offs shrink taxable income on a return, so the return can look weaker than the cash actually moving through your accounts. HousingWire lists the bank statement HELOC as a revolving second-lien tool for self-employed homeowners tapping equity. It also reports that non-QM lending reached about $239 billion in a recent year, with bank statement loans at 34% of that volume and DSCR loans at 29%.

On this network the line is a standalone product that can sit in first or second lien position. If you already have a first mortgage you like, the line leaves it alone, and CLTV simply counts that mortgage against your equity.

One availability note matters. This HELOC is offered in Lendmire’s 16 full-service states. That is narrower than the 41-market DSCR footprint, which includes Washington, D.C.

Who Actually Offers This Line?

Large retail lenders are built around traditional income paperwork, and this product is not. Lendmire is a mortgage broker. It arranges the line through select wholesale lenders and does not lend the money itself.

That is why a ranked list of company names would mislead you. The lenders that write this product depend on your occupancy, credit profile, leverage, and property type. The right program for your situation is the one whose guidelines match your file.

• Which draw and repayment structure applies to my occupancy? For an investment property, the answer here is five years interest-only, then 25 years of repayment.
• What is the CLTV ceiling for my credit score and occupancy? Here, an investment line tops out at 70% CLTV, with a 700 minimum credit score.
• How much must I draw at closing? Here, at least 75% of the line.
• Does pricing ever convert to fixed? Here, it never does.
• Who can hold title? Here, an individual or a revocable living trust.
• What does the lender count against me? Here, DTI is tested on the maximum draw.

A page that ranks brand names but cannot state these basics is selling leads, not loans. Ask for the answers in writing before you spend money on an appraisal.

How Underwriting Treats the Line, Step by Step

Underwriting tests the borrower in a fixed order: income, credit, equity, debt load, valuation, then title and property. Each step can cap the line or stop the file. Here is the sequence.

1. Income. The lender builds qualifying income from 12 to 24 months of personal or business statements. Non-income deposits come out. On business accounts, an expense factor applies. Personal-account deposits generally skip that reduction, because there is no business expense to net out. The loan is reviewed on documented income under the applicable program, subject to lender guidelines.

2. Credit. An investment line needs a 700 minimum score. The score model is single-bureau and keyed to the primary wage earner. The report can be no more than 90 days old at closing, and rescores are not allowed.

3. Equity. Take the property’s value, multiply by the CLTV ceiling, then subtract the first mortgage and any other liens. On an investment property the ceiling is 70% CLTV. The smallest of the equity limit, the line’s dollar cap, and the DTI result sets the size.

4. Debt load. DTI maxes at 50%. The lender tests it on the interest-only payment calculated on your maximum draw, not the amount you plan to use. An unused line still counts against you.

5. Valuation. Lines at or below $500,000 ordinarily use an automated valuation instead of a traditional appraisal. You can request a full appraisal in any case. A higher CLTV may call for a second valuation.

6. Title and property. Single-family homes, 2-4 units, PUDs, townhomes, and condos qualify, including non-warrantable condos. Title must sit with an individual or an inter vivos revocable living trust.

7. Closing draw. At least 75% of the line is drawn at closing. Each later draw has a $1,000 minimum on this structure.

Lines start at $25,000. The larger combined exposure caps, which differ by program, limit what one borrower can hold across several lines. They do not raise the size of any single investment line.

The 5/25 Structure in Practice

During years one through five you pay interest on what you have drawn. In year six, borrowing stops and the balance amortizes over 25 years. Principal joins the payment, so the payment steps up. That step-up is scheduled, not a surprise balloon.

Experian describes a typical retail pattern of a five- to 10-year draw followed by a 20-year repayment. It also notes that many borrowers see payments more than double against the interest-only phase. This network’s 5/25 structure is shorter on the draw than the long end of that market range and longer on repayment.

For five years, the carrying cost is interest only. In year six, the same balance must start paying down over 25 years. Throughout both phases, pricing floats in either direction and never converts to fixed.

Stress-test that year before you sign. Ask what the new payment does to your cash flow if the property is vacant for a stretch. Ask what happens if deposits dip in a slow season. If the answer makes you nervous, draw less or size the line smaller.

Two mechanics shape your choices. First, the 75% closing draw means you cannot take a thin slice. If you want only a small amount now and the rest later, this structure is a poor match. Second, because DTI uses the maximum draw, a large line can crowd out your next purchase approval even when you have not spent it.

Where the General Rule Breaks

Occupancy changes the menu. Primary residences and second homes can choose between two structures, while an investment line gets only one, the 5-year draw with 25-year repayment, outside Tennessee.

Other edge cases that matter to investors:

• Tennessee: both structures shorten. The 5-year draw pairs with a 10-year repayment instead of 25.
• LLC-owned rentals: an LLC, corporation, partnership, or irrevocable, blind, or land trust cannot hold title. A property already deeded to an LLC needs a vesting change, or a DSCR cash-out instead.
• Low valuation: CLTV counts the first mortgage in full. A small drop in value can cut the available line by far more than the value fell.
• Credit events: a bankruptcy needs four years of seasoning from discharge or dismissal. On investment files, a foreclosure seasons seven years, and a deed-in-lieu, pre-foreclosure, or short sale seasons four.
• Exposure: a borrower is limited to three lines. Anyone with more than 15 financed properties is not eligible.
• Listed properties: in several states, a property listed for sale, or listed within the past 60 days, is ineligible.
• Property types not offered: manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned property are not offered.
• Floating pricing: the CFPB’s HELOC brochure notes that a variable-rate plan’s payment can change even if you draw nothing more. The same brochure says lenders often schedule full repayment over ten or 15 years. A 25-year repayment is a gentler schedule than that example.

Bank Statement HELOC vs. DSCR Cash-Out

The two products test different things. A bank statement HELOC tests you. A DSCR loan tests the rent.

A DSCR cash-out refinance qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. About six months of seasoning is the common expectation. Coverage of 1.00 is where many select programs start. A separate select-lender path goes below 1.00, with leverage and terms adjusted. DSCR loans can be written to LLC-titled borrowers, subject to program terms.

Do not read a passing coverage ratio as positive cash flow. The calculation compares rent to principal, interest, taxes, insurance, and dues only. Repairs, vacancy, management, utilities, and capital spending sit outside it. Lendmire’s complete DSCR loans guide walks through the full calculation.

The choice often comes down to the property and the borrower. Strong deposits and thin rent point toward the HELOC. Entity-held property or thin personal income points toward DSCR. Many investors compare both before deciding.

Who This Structure Fits (and Who It Doesn’t)

It tends to fit a self-employed investor who owns the rental in their own name or a revocable trust. It also suits someone whose deposits show strong income but whose tax return does not. And it works for an investor who wants to keep a first mortgage in place.

It fits poorly in these cases:

• You hold the property in an LLC.
• You want a small initial draw.
• You need more than $500,000 against a rental.
• Your income depends on rent alone.

Using the line for a down payment carries a specific risk. Borrowing the down payment raises your total debt. The new payment starts when the funds land, whether or not the next property is rented. Tax treatment varies; consult a qualified professional.

Five Things People Get Wrong

Bank statement does not mean no documentation. The lender reviews deposits, an expense factor, credit, DTI, CLTV, and the property.

A HELOC is not always interest-only during the draw. That is a common pattern, not a rule. Here, interest-only is part of the program design.

The draw is not always 10 years with 20 to repay. That is the generic retail pattern. The investment structure here is five years, then 25.

Rent and an LLC do not qualify this line. It is borrower-tested, and title must sit with an individual or a revocable trust.

Pricing does not lock after the draw. It floats through both phases and never converts to fixed.

Next Step

If you are considering a home equity line and want to see how the numbers work, Lendmire can help you compare HELOC options based on the property, the equity available, credit profile, combined leverage, and your goals. Call 828-256-2183 to talk through your file. Lendmire is a broker that arranges these lines through select wholesale lenders, and every approval depends on the lender’s guidelines and full review.

About Lendmire

Lendmire is a mortgage brokerage (NMLS# 2371349) arranging home equity lines of credit — primary-residence, second-home and investment-property lines — through a wholesale lending network in its 16 full-service states. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. HousingWire: Non-QM Loans Guide

2. Experian

3. CFPB HELOC brochure (print edition)